Gold Bonds and Silver Agitation

Volume 8, No. 4 (Winter 2005)

During the late nineteenth century, when silver agitation threatened the gold standard in the United States, gold bonds offered investors some protection from the uncertainties concerning the monetary standard in the United States. Gold bonds, therefore, sold at a premium relative to similar currency bonds. This premium can be used to examine the degree to which the financial markets were concerned for the gold standard during the tumultuous 1890s. Care must be taken in assembling samples of gold and currency bonds, with which to track the premium on gold bonds, so that only bonds of uniformly high quality are included in the samples.